People living on Social Security benefits all over the United States are asking..."Can Social Security be garnished?" "Can a debt collector take your Social Security benefits?"
Debt collectors are famous for calling you at home (or at work, which is against the Fair Debt Collection Practices Act), and making threats. "If you don't pay your bill, we're going to get a court order and garnish part of your Social Security and levy your bank accounts." People wonder..."can they really do that?"
The answer is no! A creditor can't garnish your Social Security benefits. As for your bank accounts, it all depends. My advice to you is - be very careful. When a creditor attempts to collect on a debt you owe them, after they have pushed you around and bullied you into paying them, their next step is to sue you if you are financially unable to pay them.
Out of your Control -
There are many circumstances that occur which are out of our control that place us in this situation, especially if you are a senior. Creditors and debt collectors love to attack seniors because they believe seniors are weak, easily persuaded, easy to push around and lack knowledge of the law.
Whether it is because of a divorce, death of a spouse or health issues, the fact remains that it happens to the best of us and often it is not by choice but by circumstances. As we get older we find ourselves incurring more medical bills and many times we have difficult decisions to make - do we eat or do we get the medicine we need?
We find ourselves stuck between a rock and a hard place, especially since we haven't received a cost of living increase in our Social Security benefits for the past two years. Our government states the reason for this is that the cost of living hasn't gone up in the past two years. Yet every where you look the cost of living has increased dramatically.
If you are one of the lucky ones and don't have medical bills, you still have to make a choice between buying food or starving, paying your mortgage or rent and utilities or being homeless and trying to pay back a debt which you simply can't do. These are not easy decisions to make.
Creditors go After a Judgment -
If and when the creditor obtains a judgment for the debt, the next course of action is to either garnish part of your income or put a levy on your bank accounts, or both. Debt collectors are banking on you not knowing your legal rights when it comes to your Social Security benefits.
If you are a "Baby Boomer" or older and worked most of your life, you paid your Social Security taxes. That money is yours and you are entitled to every penny of it. So why not protect what is legally yours. That's why you need to read on.
Federal Law and Debt Collectors -
Under federal law, a creditor may not touch your Social Security benefits. There are only a few exceptions. If you owe the IRS money, if you owe child support, and/or if you owe alimony. Other than these exceptions, your Social Security benefits are untouchable by creditors and debt collectors.
Beware of Opening other Bank Accounts or Mingling Funds -
Now for the catch - as long as your funds are only in a simple or general checking account or savings account, they are safe. While Social Security benefits are always exempt from creditors and debt collectors, if the unspent funds are mingled with other accounts such as a savings account from a pension plan or retirement fund, they'll lose their protected status.
Keep in mind that whether you have a general checking account, a savings account or both, if the funds are solely Social Security benefits that have accumulated in an account, the funds are protected by law.
But if on the other hand you are mingling your left over Social Security benefits with your pension plan savings account or retirement fund, I suggest you keep accurate records and be extremely careful.
You may even want to contact a Tax attorney who can advise you on how to protect your assets from creditors.
Become your own Advocate -
If a creditor or debt collector tries to sue you for monies owed or threatens you in any manner, let them know that you are very aware of the law regarding your Social Security benefits and that you are protected by federal law.
Stick buy your guns and be your own best advocate. Believe me they will be shocked to find out that you are fully aware of this law. They will soon back off. Although they may continue to harass you on down the road, don't let them scare or upset you...you are protected!
Stop the Harassing Calls -
If a creditor or debt collector persistently calls you on the phone and harasses you, let them know that they are breaking the Fair Debt Collection Practices Act, and that if they need to communicate with you in the future, they must do so in writing and stop calling you.
Be advised that by law you must write the creditor or debt collector and tell them that the only form of communication you will receive and accept from them must be in writing.
Legally you do not have to accept their phone calls and can simply hang up on them. Although some creditors and debt collectors will respect your request over the phone, it is always best to do it in writing and keep a copy for your records.
Your Bank will help you -
Proving that the money in your checking or savings accounts are solely acquired by your Social Security benefits may be difficult if you are sued. Keep in mind that your bank is there to help you and remember your Social Security benefits are protected by law. I just can't repeat that enough.
All you have to do is go to your bank and let them know what's going on. Be honest with them and tell them you need your past bank statements to date, showing the dates and amounts of your Social Security deposits.
If you have put some of that money into a simple or general savings account, be sure to obtain those statement as well. The bank will be happy to give them to you.
Contact the Social Security Administration -
If you need back statements of your benefits, you can contact the Social Security Administration either by phone or online. They won't hesitate to assist you. If fact, they will help protect your benefits and provide you with additional information which you can obtain either on the Internet or through the mail.
In summary, knowledge is the beginning of wisdom.
You can read about the Fair Debt Collection Practices Act at http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf.
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